Apple’s (AAPL) Stock Gets a Rare Upgrade

On the day that Samsung launched its most anticipated smartphone, BTIG’s Walter Piecyk — one of the first analysts to downgrade Apple (AAPL)’s stock last year — explains why he upgraded the iPhone maker to ‘Buy’ from ‘Neutral’ and put a $540 price target on the stock.

In an interview with CNBC’s Melissa Lee, Piecyk said he based his upgrade on the medium term rather than the short term:

“The buy side wants to look towards 2014 where there could be earnings growth,” he said, adding that the Street has gone from basically “thinking that Tim Cook has to provide some revolutionary product to now assuming that he won’t even do obvious things to generate revenue.” According to Piecyk, if management doesn’t do these things, they’ll probably be replaced.

During the interview Piecyk also said that there is a revenue opportunity for Apple with a budget iPhone.

“The market opportunity for Apple — that they don’t address right now — is that 70% of the global subscriber base is pre-paid. They want an iPhone,” Piecyk said, citing mobile phone re-seller Gazelle, which says that there is an insatiable demand for people buying a cheaper version of the iPhone in China, India, Africa and Thailand.

“If Apple can address [these markets], that is incremental revenue and profit opportunity,” the analyst added, noting that dumping Apple right now would be a mistake.

“By not owning the stock, you’re taking the risk that Apple still won’t rally on other items [such as management unveiling a dividend policy by the end of March] that will take it higher,” he said.

At $432 per share, AAPL remains off nearly 19% on the year and 39% from its all-time high of $705 set in September.